On the day of the 7 July bombings, I came across a man on London's Edgware Road whom I recognised as a Muslim fundamentalist from a stall near Marble Arch, where he regularly handed out leaflets. It was about three hours after the bomb had exploded on a train near Edgware tube station and he was making an impromptu speech to a knot of passersby about the CIA plot to blow up the Twin Towers and other such lunacies.

He was a small, energetic character who was more than happy to argue with anyone on the subject of Muslim persecution in his distinct northern accent. The only thing that stopped him in his flow that morning was when two senior police officers pushed through the little crowd to make sure we weren't threatening him in any way, a moment which I wrote later seemed a reassuring sign that whatever our reaction to the bombings our society would continue to allow free speech.

I saw him several times more at his usual pitch. Then he disappeared. It turned out he was Mohammed Hamid, a key figure in the lives of the men who tried to blow themselves up two weeks later on 21 July. In 2008, he was jailed indefinitely. The bumptious guy I had argued with in the street was the head of a network that spotted and groomed potential terrorists. He had urged men to carry out even bigger attacks and at his trial he was reported as saying that 7/7 was "not even a breakfast for me". That sounded very much like Mohammed.

Only with the inquest into the deaths of the 52 victims have we really understood the full horror that occurred in London that day, and even after all this time it gives me pause to think what one human being is prepared to do another or, in Mohammed's case, advocate being done, in the name of a cause that he could only express in a stream of slogans and fantasy.

The picture emerging is not entirely heroic. Some passengers stopped to take pictures of the dead and wounded. At Aldgate, where Shehzad Tanweer detonated a bomb on the Circle Line, firemen were incredibly slow to enter the tunnel. Michael Henning, then a broker from Kensington, recalled his anger at seeing three groups of fire fighters standing idle.

He said: "There were people who may have survived if they had got urgent medical response there... some of them died in agony for 20, 30, 40 minutes: at least they should have had the dignity of having some morphine."

But the accounts of the reactions of Dr Gerardine Quaghebeur, a passenger on that train, and a man named Steven Desborough are extraordinary. They stayed behind in the filth and darkness to look after, among others, a 24-year-old woman named Carrie Taylor, who died from dreadful injuries before she was taken out of the tunnel. And there is the off-duty police officer Elizabeth Kenworthy, who is credited with saving the lives of Andrew Brown and Martine Wiltshire by applying tourniquets to their leg injuries. Ms Wiltshire lost both legs; Mr Brown lost one. But they survived because Ms Kenworthy did all she could for them, while setting aside her own shock and suppressing the instinct to flee.

The inquest evidence is more impressive than anything that came out of the more recent subterranean drama – the release of the trapped Chilean miners – and I found myself wishing that the 21/7 bombers and Mohammed Hamid had been compelled to listen to the witnesses appearing at the coroner's court last week, because this kind of violence can only be carried out by people who have no imagination or whose feelings have been cauterised by fanaticism, neither of which may be an irredeemable condition.

Five years on, the victims and helpers show the most remarkable fortitude in the way they have repaired their lives and got on with the business of living. They have struggled while, as a society, we have wrestled with the problem of how to defend ourselves against the moral corruption so exuberantly voiced by Mohammed Hamid that day.

The immediate reaction of the Blair government was in many ways understandable: detention without trial, control orders, stop-and-search powers, mass surveillance and intrusion and the banning of fundamentalist organisations. But gradually it has become clear that we went too far, which is why the home secretary Theresa May ordered a review of all terror legislation in July, promising to put right failures and "restore ancient civil liberties".

This was good news, but the longer new ministers are in power the more protective they are likely to feel and the more inclined they are to heed the warnings of the intelligence services and police, which have noticeably increased over the last month.

It is also known that the Crown Prosecution Service opposes the lifting of 28-day detention without charge and control orders and has been lobbying for the retention of both; a similar case has been made by the police and the security service.

Ahead of the terror laws review by the former DPP, Lord Macdonald, an indication of the government's mood came in the strategic defence and security review published last week, where, in an obscure passage, it was announced that the Home Office was reviving a plan to track the email, text, internet and mobile phone details of everyone. The pretext for this is the terrorist threat, but it flies against the coalition agreement, which in section 10 promises "an ending of storage of internet and email records without good reason".

Presumably the coalition calculated that in the week of the comprehensive spending review this would not be noticed or that the details of the inquest would silence objections. Whatever the reason, this is unacceptable in a democracy.

What is interesting is that in the Labour party there are signs of an equal and opposite reaction. The longer politicians are out of power the more perspective they seem to gain. Ed Miliband has murmured his regret about steps taken against liberty under Tony Blair, while the former counterterrorism minister Tony McNulty used the pretext of the inquest to recommend an end to control orders and the reduction of the maximum period a person can be held without charge from 28 to 14 days, which is proof, if nothing else, that wisdom is sometimes granted to those in opposition.

"The balance between protecting the public and upholding Britain's liberal traditions," as he put it, is still one of the hardest things to get right. Five years on, I would like to hear the thoughts of such heroic individuals as Mr Henning, Dr Quaghebeur, Mr Desborough, Mr Brown, Ms Wiltshire and Ms Kenworthy. I was above ground that day talking to a fantasist; they were below dealing with reality of a terrorist attack.